New Strategy Generates Action…Operational Plan Produces Results

TypeStrategy Development and Operational Planning
Quick FactsMature, $40MM family-owned manufacturer of industrial equipment (“EquipmentCo”). Three locations - two US, one Asia. Multiple branded product lines sold through four channels - direct sales, industrial distributors, manufacturers representatives and industrial catalogs.
ChallengesA number of stress points were negatively impacting the company’s performance:
  • an increase in the business ‘complexity’
  • foreign competition (from China) had become stronger
  • structural changes in traditional industry market segments shifted demand
  • traditional and historical marketing and sales methods had lost some effectiveness in the internet age
  • the company’s established distribution channels were quickly changing
  • mature business segments were constraining resources needed for new and emerging business segments
  • there was no “common view” about the future direction of the business among the shareholders and management

The shareholders and management of EquipmentCo decided they needed an independent evaluation/due diligence of the “state of the company”. It was essential to re-establish acceptable levels of profitability and to understand “who are we (as a company) and where do we need to go”.
ApproachMcHugh & Company designed and completed three distinct, but connected projects: (1) an integrated strategic/operational/financial bottoms up and top down assessment of the entire business; (2) a three year plan that was understandable, actionable, and motivational for the company; (3) an annual operational plan that was tied to the major initiatives from the strategic plan. These projects involved employees at all levels of the organization, included market focused interviews, and relied upon extensive data analysis related to the business model, product lines, the industry and competitors.
ResolutionSince the completion of these projects, the company has nearly doubled EBITDA, carried out significant changes to achieve higher manufacturing efficiency, and opened up new opportunity space to grow into.

The business review and strategic plan produced a number of major changes to the company. These included:
  • strengthening the leadership team
  • simplifying the overall organizational structure
  • focusing the business model - divesting an underperforming product line
  • establishing a new business development group
  • making heavy investments in new technology: IT and engineering
  • aggressively cutting manufacturing costs
  • creating innovative go to market tactics


The operational planning process introduced ‘the how’ - specific accountability and metrics to insure the strategic initiatives were implemented. For each major initiative, a series of action steps were developed. Each action step was assigned an ‘owner’, a due date for completion and the expected result (i.e. how to measure success).

Links to the other strategy development cases:
  1. Changing the Business Model
  2. Technology Company’s First Strategic Plan
  3. Corporate Planning in a Diversified Multi-National
To view a list of all McHugh & Company Case Studies, click here.